3M 2015 Annual Report Download - page 109

TableofContents
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InOctober2015,WestMorgan-EastLawrenceWater&SewerAuthority(“WaterAuthority”)filedanindividualcomplaintagainst
3MCompany,Dyneon,L.L.C,andDaikinAmerica,Inc.,intheU.S.DistrictCourtfortheNorthernDistrictofAlabama.The
complaintalsoincludesrepresentativeplaintiffswhobroughtthecomplaintonbehalfofthemselves,andaclassofallownersand
possessorsofpropertywhousewaterprovidedbytheWaterAuthorityandfivelocalwaterworkstowhichtheWaterAuthority
supplieswater(collectively,the“WaterUtilities”).Thecomplaintseekscompensatoryandpunitivedamagesandinjunctiverelief
basedonallegationsthatthedefendants’chemicals,includingPFOAandPFOSfromtheirmanufacturingprocessesinDecatur,have
contaminatedthewaterintheTennesseeRiveratthewaterintake,andthatthechemicalscannotberemovedbythewatertreatment
processesutilizedbytheWaterAuthority.
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InDecember2010,theStateofMinnesota,byitsAttorneyGeneralLoriSwanson,actinginitscapacityastrusteeofthenatural
resourcesoftheStateofMinnesota,filedalawsuitinHennepinCountyDistrictCourtagainst3Mtorecoverdamages(including
unspecifiedassessmentcostsandreasonableattorney’sfees)forallegedinjuryto,destructionof,andlossofuseofcertainofthe
State’snaturalresourcesundertheMinnesotaEnvironmentalResponseandLiabilityAct(MERLA)andtheMinnesotaWater
PollutionControlAct(MWPCA),aswellasstatutorynuisanceandcommonlawclaimsoftrespass,nuisance,andnegligencewith
respecttothepresenceofPFCsinthegroundwater,surfacewater,fishorotheraquaticlife,andsediments(the“NRDLawsuit”).The
StatealsoseeksdeclarationsunderMERLAthat3MisresponsibleforalldamagestheStatemaysufferinthefutureforinjuriesto
naturalresourcesfromreleasesofPFCsintotheenvironment,andunderMWPCAthat3Misresponsibleforcompensationforfuture
lossordestructionoffish,aquaticlife,andotherdamages.
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InNovember2011,theMetropolitanCouncilfiledamotiontointerveneandacomplaintintheNRDLawsuitseekingcompensatory
damagesandotherlegal,declaratoryandequitablerelief,includingreasonableattorneys’fees,forcostsandfeesthatthe
MetropolitanCouncilallegesitwillberequiredtoassessatsometimeinthefutureiftheMPCAimposesrestrictionson
MetropolitanCouncil’sPFOSdischargestotheMississippiRiver,includingtheinstallationandmaintenanceofawatertreatment
system.TheMetropolitanCouncil’sinterventionmotionwasbasedonseveraltheories,includingcommonlawnegligence,and
statutoryclaimsunderMERLAforresponsecosts,andundertheMinnesotaEnvironmentalRightsAct(MERA)fordeclaratoryand
equitablereliefagainst3MforPFOSandotherPFCpollutionofthewatersandsedimentsoftheMississippiRiver.3Mdidnot
objecttothemotiontointervene.InJanuary2012,3MansweredtheMetropolitanCouncil’scomplaintandfiledacounterclaim
allegingthattheMetropolitanCouncildischargesPFCstotheMississippiRiveranddischargesPFC-containingsludgeandbiosolids
fromoneormoreofitswastewatertreatmentplantsontoagriculturallandsandlocalarealandfills.Accordingly,3Mrequestedthatif
thecourtfindsthattheStateisentitledtoanyofthedamagestheStateseeks,3Mseekscontributionandapportionmentfromthe
MetropolitanCouncil,includingattorneys’fees,underMERLA,andcontributionfromandliabilityfortheMetropolitanCouncil’s
proportionalshareofdamagesawardedtotheStateundertheMWPCA,aswellasunderstatutorynuisanceandcommonlaw
theoriesoftrespass,nuisance,andnegligence.3MalsoseeksdeclaratoryreliefunderMERA.
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InApril2012,3MfiledamotiontodisqualifytheStateofMinnesota’scounsel,Covington&Burling,LLP(Covington).In
October2012,thecourtgranted3M’smotiontodisqualifyCovingtonascounseltotheStateandtheStateandCovingtonappealed
thecourt’sdisqualificationtotheMinnesotaCourtofAppeals.InJuly2013,theMinnesotaCourtofAppealsaffirmedthedistrict
court’sdisqualificationorder.InOctober2013,theMinnesotaSupremeCourtgrantedboththeState’sandCovington’spetitionfor
reviewofthedecisionoftheMinnesotaCourtofAppeals.InApril2014,theMinnesotaSupremeCourtaffirmedinpart,reversedin
part,andremandedthecasetothedistrictcourtforfurtherproceedings.Thedistrictcourttookevidenceonthedisqualification
issuesatahearinginOctober2015.InFebruary2016,thedistrictcourtruledthatCovingtonviolatedtheprofessionalethicsrule
againstrepresentingaclient(heretheStateofMinnesota)inthesameorsubstantiallyrelatedmatterwherethatperson’sinterestsare
materiallyadversetotheinterestsofaformerclient(3M).Thedistrictcourt,however,denied3M’smotiontodisqualifyCovington
becauseitfurtherfoundthat3Mimpliedlywaivedbydelayingtoasserttheconflict.3Misreviewingthedistrictcourt’sopinionto
determinenextsteps.Otheractivityinthecasehadbeenstayedpendingtheoutcomeofthedisqualificationissue.Inaseparatebut
relatedaction,theCompanyfiledsuitagainstCovingtonforbreachofitsfiduciarydutiestotheCompanyandforbreachofcontract
arisingoutofCovington’srepresentationoftheStateofMinnesotaintheNRDLawsuit.
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